Slump in Consumer Spending Points to Housing Hurdle

Slump in Consumer Spending Points to Housing Hurdle

The economic recovery is facing a big hurdle: a lack of consumer confidence.

“As long as consumer spending is lagging on the personal shopping front, home buying is going to remain out of the question for many families,” HousingWire reports.

The numbers are in from this year’s Black Friday shopping, and retail spending dropped for the first time in at least seven years, according to the National Retail Federation.

However, consumer are making progress on paying down their debts — particularly when it comes to mortgages — which could prove to be a big positive for the housing market, analysts say.

"Our findings suggest that the consumer de-leveraging experienced since the financial crisis will trough in the next year or two, driven by improved mortgage credit availability and better consumer demand," says Paul Miller, a managing director at FBR Capital Markets.